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US STOCKS-Wall St cuts losses as diplomacy ramps up in Ukraine
March 12, 2014 / 7:47 PM / 4 years ago

US STOCKS-Wall St cuts losses as diplomacy ramps up in Ukraine

* EPL Oil to be acquired by Energy XXI for $2.3 bln

* Herbalife shares tumble on FTC investigation

* Dow off 0.28 pct, S&P down 0.2 pct, Nasdaq up 0.11 pct

By Rodrigo Campos

NEW YORK, March 12 (Reuters) - U.S. stocks were little changed on Wednesday, as equities recouped much of their earlier declines amid signs of progress in diplomatic attempts to ease tensions in Ukraine.

Stocks were pressured by concerns about a weakening economy in China. London copper prices, seen as a proxy for economic health due to its broad industrial use, rebounded after hitting their lowest level since July 2010.

U.S. Secretary of State John Kerry will meet his Russian counterpart, Sergei Lavrov, in London on Friday ahead of a Sunday referendum on whether Ukraine’s Crimean peninsula will join Russia or go independent. The legality of the referendum is disputed.

Spot gold hit a six-month high on its safe-haven appeal.

However, money is on the sidelines and investors worried about missing another leg-up in the five-year U.S. equity bull market are keeping indexes near recent highs, analysts say.

“The situation in Ukraine and a slowing China are going to matter but they haven’t mattered yet. Commodity prices are falling and that is tied to demand,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

“People think they missed out and the market is going to do the same it did last year,” she said. “There’s more retail money flowing into the system, supporting stocks.”

The Dow Jones industrial average fell 46.06 points or 0.28 percent, to 16,305.19, the S&P 500 lost 3.81 points or 0.2 percent, to 1,863.82 and the Nasdaq Composite added 4.604 points or 0.11 percent, to 4,311.792.

Geopolitical developments have moved to the forefront this week on a vacuum of major corporate results and market-driving economic data. The S&P 500 closed at a record high last Friday.

“We’ve climbed so far, to continue to climb is definitely going to be a see-saw move,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

Herbalife fell 7.5 percent to $60.50 after the company said the U.S. Federal Trade Commission had opened an inquiry into its operations. Shares briefly fell as much as 16 percent.

Shares of Fannie Mae and Freddie Mac fell sharply on Wednesday, a day after leaders of the Senate Banking Committee announced an agreement on legislation to wind down the government-owned mortgage financiers. Fannie lost 9.9 percent to $3.63 and Freddie fell 15.8 percent to $3.40.

EPL Oil & Gas Inc jumped 29.8 percent to $37.79 after the company agreed to be acquired by larger rival Energy XXI Ltd for $2.3 billion including debt. Energy XXI shares lost 6.4 percent to $21.88.

Express Inc dropped 12.8 percent to $15.91 after the apparel retailer reported fourth-quarter earnings and forecast a profit for the current quarter that fell far short of analyst expectations.

Oxigene Inc surged 71.5 percent to $4.15. The company said its experimental drug Zybrestat, combined with Roche’s cancer drug Avastin, significantly slowed progression of recurrent ovarian cancer better than Avastin alone in a mid-stage clinical trial.

Geron Corp plunged 61.8 percent to $1.68. The company said the U.S. Food and Drug Administration ordered a halt to trials of a cancer drug over concerns about potential liver damage.

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